Wednesday, March 11th, 2015
By Malcolm Hamilton, Robert Knox and Roger Short, members of Ontario Highlands Friends of Wind Power
On 21 January, 2015, an anti-wind group calling themselves the Multi Municipality Wind Turbine Working Group (MMWTWG) wrote the Provincial Government claiming wind turbines are completely responsible for the increase in electricity prices in Ontario and that “…more wind power will increase hydro rates”.
They have no evidence this is the case but they want the Ontario Government to “…conduct a third-party cost-benefit analysis before there is any further procurement of wind or solar capacity.”
Should they? No! There is no evidence to support the anti-wind group claims or to justify a study.
The price of electricity in Ontario has increased because of decades of under investment in both new sources of electricity and the electricity transmission infrastructure needed to deliver power.
Studies (e.g. Hydro Quebec’s annual survey) show that Ontario’s electricity costs to consumers are about the middle of the range and have been for some time.
The lowest cost jurisdictions in Canada are Quebec, B.C. and Manitoba. They rely on less expensive and more manageable hydroelectric generation for their base load and sell any surplus generation to other jurisdictions, including Ontario. This is not new. It has been the case for years.
New generation is always more expensive than existing generation. However, new wind energy is cheaper than new nuclear power and is cost-competitive with new hydroelectric power. Also, wind generation, like all renewable generation, is not subject to the risks of rising fuel costs like natural gas.
Wind energy developers invest their own capital and absorb the risk of building and operating new wind energy projects, pay for dismantling the turbines and supporting infrastructure – the result is no front-end or long-term risks to taxpayers and ratepayers.
Lifetime wind energy costs are relatively small and will remain so for three reasons:
Wind is intermittent but predictable and functions effectively as a base load source of power- particularly for communities close to the generators. The issue is not intermittent wind but excess nuclear power at times of low demand because nuclear generation cannot be efficiently powered down to meet changes in demand.
Energy storage technology for wind and solar, which partially compliment each other, are developing quickly and continue to reduce the issue of intermittency. Of course, the opportunity to tie in to the vast pools of stored hydro-electric power in Quebec and Manitoba practically eliminates any issues of intermittency.
The location and construction of peaking units has nothing to do with wind generation but everything to do with the inflexibility of Ontario’s nuclear fleet. Gas has essentially replaced coal as nuclear’s partner on the grid.
In 2014, nuclear generation produced 94.9 TWh or 62% of Ontario’s total electricity. Wind turbines produced about 6.8 TWh or 4% of total annual generation (Source: IESO Total Electricity output 2014).
According to MMWTWG the 4% of electricity generated by wind turbines is totally responsible for the significant surpluses experienced by nuclear generators. This is hard to imagine let alone believe.
The problem is not wind generation but the lack of maneuverability of the nuclear base load. Technically and financially nuclear cannot be shut down to follow load swings when it is not needed so it becomes surplus to demand.
Ontario electricity consumers pay a composite price for their electricity: the wholesale price of electricity plus a Global Adjustment.
“The Global Adjustment covers the cost of building new electricity infrastructure and maintaining the existing one in the province, as well as providing conservation and demand response programs. It covers the difference between regulated rates to nuclear and large hydroelectric generators and the market price.
“For most small consumers, the Global Adjustment is incorporated into their time-of-use and tiered rates. They will not see it as a separate item on their bill.
“For other consumers − including medium and large businesses as well as residential customers on retail contracts − the Global Adjustment appears as a separate line on their bill.”
(Ref.IESO, Electricity Pricing in Ontario)
The IESO doesn’t even mention wind generation in their explanation of the Global Adjustment.
The fact is that wind generation is a small but transparent part of Ontario’s total wind generation but scheduled to grow. The costs are what you see and what you pay for is the power generated. The owners of the generators are responsible for everything else including new connections to transmission
As far as the main base load nuclear generators, no one has any reliable idea what it will cost to refurbish or dismantle them or how much nuclear generation is going to cost on a lifetime basis. Regrettably, this is not something the public knows.
Maybe nuclear reactors will be more flexible in the future, able to deliver electricity when needed and the price of the electricity they generate will be reasonably close to wind.
Prudent folk shouldn’t count on it based on history and estimates already being made by independent experts.